Bill 92: New financial omnibus bill modernizes regulatory framework applicable to insurance, securities, financial institutions and real estate brokerage in Quebec

Insurance sector

Creation of the Chambre de l’assurance

The significant changes proposed by Bill 92 include provisions aimed at amalgamating the Chambre de la sécurité financière (self-regulatory organization overseeing certain finance and insurance advisors and representatives) and the Chambre de l'assurance de dommages (organization overseeing damage insurance agents and brokers as well as claims adjusters) to form a new entity, the Chambre de l'assurance, which would replace the merged chambers in all ongoing judicial or administrative proceedings to which they are parties.

However, it is anticipated that mutual fund dealer representatives and scholarship plan dealer representatives will be excluded from the jurisdiction of the new Chambre de l’assurance (Insurance Chamber). In this context, it will be interesting to see if the powers governing mutual fund dealer representatives will be transferred to the Canadian Investment Regulatory Organization.

Expanded accessibility to the role of claims adjuster

Bill 92 also stipulates that the Autorité des marchés financiers (AMF, Quebec’s financial markets regulator) could, in certain circumstances, authorize individuals to act as claims adjusters even if they do not hold a certificate to this effect. This authorization could extend to damage insurance agents and brokers, to individuals who have already held such a certificate, as well as to claims adjusters registered outside of Quebec.

This measure seems to be inspired by the temporary easing measure introduced by the AMF in August 2024, following the torrential rains that led to an exceptional volume of claims. As a reminder, the AMF had then allowed firms and independent companies registered in the field of claims adjustment to use non-certified persons to carry out certain activities normally reserved for claims adjusters, in order to respond quickly to demand. 

This is therefore an additional measure proposed by the legislator to remedy the shortage of resources in an industry subject to increasing pressure, particularly in the context of major disasters.

Other measures applicable to the insurance sector

Among the other notable legislative changes in the insurance sector, Bill 92 proposes to introduce an exception to the current obligation imposed on Quebec insurers to maintain a majority of directors residing in Quebec. This exception would apply to insurance companies that belong to a financial group and collecting more than 40% of their premiums outside Quebec. In such a case, the minimum number of directors residing in Quebec could be lowered to one-third, provided that the majority of the company's directors still reside in Canada. In our view, this measure provides increased flexibility to Quebec insurance companies while promoting broader geographic representation in corporate governance.

Bill 92 also amends the Act respecting the distribution of financial products and services to broaden the AMF’s regulatory powers over firms, independent partnerships and independent representatives. More specifically, the proposed amendments provide that the AMF will now be able to adopt by-law management rules that the latter must observe, particularly for governance. It will be interesting to see whether this additional power will lead to a more robust regulatory framework applicable to brokers and managing general agents, particularly in the context of industry consolidation in recent years. 

Finally, Bill 92 proposes to reduce the minimum number of mutual companies required to form or maintain a federation of mutual companies from nine to five. In addition, under certain conditions, a legal person constituted outside Quebec and authorized to carry on insurance activities could be admitted as a member of a federation of mutual companies as an auxiliary company. These changes appear to be part of a general trend towards consolidation in the damage insurance industry in Quebec and beyond its borders, aimed, among other things, at responding to the increased frequency of major climatic events and the explosion in technology-related costs.

Securities and financial planning sector

Overhaul of the Fonds d’indemnisation des services financiers

Among the major changes proposed by Bill 92 in the securities sector, we would highlight certain provisions aimed at broadening the scope of the Fonds d’indemnisation des services financiers (Fonds d’indemnisation, i.e Financial Services Compensation Fund), which aims to compensate victims of fraud, fraudulent tactics or embezzlement in connection with the provision of financial products and services.

Currently, among the representatives and companies registered under securities laws, only scholarship plan brokers and mutual fund brokers benefit from Fonds d’indemnisation coverage. Bill 92 proposes to extend this coverage to a greater number of registrants, namely to all representatives, brokers and advisers registered under the Securities Act (SA) or the Derivatives Act (DA). In addition, the AMF will be able to determine, by regulation, contribution amounts to be paid by persons covered by the Fund.

The government could also, by regulation, exclude certain victims from the right to coverage by the Fonds d’indemnisation, and the AMF could adopt regulations specifying the eligibility criteria for claims as well as the methods for calculating compensation, subject to government approval.

Change to certain registrants’ right to practice 

In the event of breaches of the SA or DA provisions, or if a registrant does not carry out its activities in accordance with its declarations, the AMF could suspend or withdraw the rights conferred by its registration or attach conditions to its registration. This would be an additional tool available to the AMF to restrict the rights of practice of registrants who do not comply with their regulatory obligations, whereas at present such measures can only be imposed by the Tribunal administratif des marchés financiers (Financial Markets Administrative Tribunal). 

The AMF can currently only impose conditions on registration when the right to practice is granted, whereas other Canadian securities regulators, such as the Ontario Securities Commission, already have the power to attach conditions to their registrants' right to practice while they are registered. The proposed amendment would therefore harmonize this power.

In addition, trading platforms will have to comply with more obligations, including the obligation to be recognized by the AMF before carrying out activities governed by the SA and to transmit any document or information required by the AMF. This measure seems to be aimed mainly at cryptoasset trading platforms and echoes recent efforts of the Canadian Securities Administrators to regulate this sector.

Geologists and engineers subject to the obligation to disclose certain information to the AMF

Members of the Ordre professionnel des géologues du Québec (Quebec’s professional order of geologists) and the Ordre professionnel des ingénieurs du Québec (Quebec’s professional order of engineers) cannot refuse to communicate with the AMF, in the context of an investigation, information or document used to prepare a report on a mining project on the grounds that they are covered by privilege. A similar requirement already applies to accountants for their audit and review of interim financial statements.

End of agreements allowing members of certain professional bodies to use the title of "financial planner"

Bill 92 provides for removing the AMF's power to enter into agreements with certain professional orders so that their members can benefit from relief for using the “financial planner” title. The Ordre des comptables professionnels agréés du Québec (Quebec’s professional order of CPAs) and the Ordre des administrateurs agréés du Québec (Quebec’s professional order of chartered administrators) had already signed such agreements, but they have expired and therefore may not be renewed.

Real estate brokerage sector

Regarding real estate brokerage, Bill 92 allows the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ, Quebec’s self-regulatory organization for real estate brokerage) to refuse to issue a licence, or suspend or revoke it if, in its opinion, the individuals or entities subject to the Real Estate Brokerage Act do not possess the probity required to carry on their activities. It also allows the discipline committee of this organization to impose at least a fine in the case of a failure to fulfil the obligation to disclose a conflict of interest provided for by the Act. The OACIQ would therefore benefit from an additional tool to protect the public. 

Similarly, Bill 92 proposes to broaden the scope of penal offenses under the Real Estate Brokerage Act. These would no longer be exclusively limited to cases of illegal brokerage without a licence but would now cover all offenses set out in the Real Estate Brokerage Act and its regulations. This amendment would allow the OACIQ, in cases of serious offenses, to file a penal complaint with the Court of Quebec rather than resorting solely to the disciplinary measures at its disposal. The minimum and maximum penalties and fines would also be increased.